Daily_Nifty_VP's View-24/08/12

LEADER POST for Friday (24/08/12)

1.         The supports are at about 5413, 5407, 5392 and and 5365 while other previous lows to watch are about 5346/30/09 and 5295. Resistances are at about 5418, 5434, 5457 and 5464. Two likely +WWs give about 5421 and 5446 (+WWs with much higher levels are not given). A number of likely -WWs give about 5377 (but point 5 is at about 5460), 5349, 5339 and 5327 (once below 5408) (-WWs with lower targets are not mentioned). A huge likely bullish flag gives levels in excess of 5600 unless killed below about 5200. An inverted flag gets nullified above about 5425. A likely rising wegde, breaks down, gives about 5295.

Nifty made a new high on Thursday and but could not close at a new high. However, the fact that it once again closed above 5400 indicates bullish tendency albeit a bit tired. But 5480-5500 is a stiff resistance zone. What's more, the -ve div persists on rsi on daily chart and I feel nifty may consolidate till a +ve div develops. Volatility will continue to be high intraday. Friday's move will most likely give indication for next week's trend. In the short term, nifty will have to give a major breakout to sustain its upmove.

2.         PCR at 1.30 and VIX at 16.12. Pre-open high/low at 5415.35/5308.85 and close at 5392.60. This may indicate a flat to mildly -ve nifty today.

3.         AS PER 9.30 STRATEGY, SELL ABOVE 5395NF TARGET 5371/5351 SL 5425. But I wonder whether NS will go below 5364.

4.         In spite of apparent bearish undercurrent, today's range is only 34 points and market is just 30 down. That shows something is amiss.

5.         Nifty opened down with a gap as expected, remained in a small range of about 38 points (in spite of a bearish undertone) and closed -ve and below yesterday's low. The range being small, neither the target nor the SL of 9.30 strategy call was triggered. The fourth support level was not breached but the target of first -ww was met. But as was stated in the morning 5364 was not broken.

Today's candle is, therefore, once again a doji. Also, weekly candle is an inverted hammer but being at the top of an uptrend, it is not a reversal sign. However, being at the top, it is also called by many as a shooting star, which is reversal pattern.

We will have to see whether Monday opens with a gap down and gives a big fall. Unfortunately, since we are talking about weekly candle, it doesn't help till we have seen next week's candle, which is too late considering that it is an expiry week. Personally, I feel nifty may move up from Tuesday and negate the "shooting star".

The intraday chart of nifty spot values with 5 min candles is shown below.